Longacre v. AB Home Health Care LLC

          MEMORANDUM DECISION AND ORDER ON DISCOVERY DISPUTE

          John H. Rich, III United States Magistrate Judge.

         Following a discovery hearing, the parties submitted simultaneous letter briefs addressing the proper temporal scope of plaintiff-relator's discovery requests in this qui tam action brought by the defendant's former supervisor and alleging that it fraudulently billed MaineCare (the Medicaid program in the state of Maine) for services rendered by unqualified individuals. While I reject defendant, AB Home Health Care, LLC's (“AB Home”), argument that, as a matter of law, discovery in this qui tam action should be limited to the period spanning Longacre's term of employment (January 21, 2014, through June 2, 2015), see Letter Brief of AB Home dated Aug. 17, 2018 (“AB Home Brief”) (ECF No. 65) at 1; Plaintiff's First Amended Complaint (“FAC”) (ECF No. 38) ¶ 7, I conclude that, even as voluntarily narrowed in her letter brief, two of Longacre's three categories of discovery remain overbroad under Rule 26's proportionality test. See Letter Brief of Rebekah Longacre dated Sept. 13, 2018 (“Longacre Brief”) (ECF No. 74) at 1-3.^[1]

         Treating the instant discovery dispute as a motion to compel production in response to Longacre's RFP Nos. 7-9, 12, 16-23, 25-29, and 31 and Interrogatory No. 4, and for the reasons that follow, I grant it in part, to the extent that I order AB Home to produce, within 21 days hereof, documents and information responsive to the first two categories of requests for the period from January 17, 2012, through the suspension of defendant's ability to bill MaineCare effective November 2017 and documents responsive to the third category for the period from March 6, 2011, through the suspension of defendant's ability to bill MaineCare effective November 2017, and otherwise deny it.

         I. Plaintiff's Allegations

         AB Home is a home-healthcare provider based in Portland, Maine, and owned by Abdulfatah Ali. FAC ¶¶ 10-11. DHHS has licensed AB Home to provide services under MaineCare. Id. ¶¶ 17-18, 22. This license allows AB Home to seek reimbursement from MaineCare for services that it provides to eligible MaineCare members. Id. ¶ 24. The requirements for reimbursement under MaineCare are set out in the MaineCare Benefits Manual, a set of rules promulgated by DHHS. Id. ¶¶ 3, 27.

         Healthcare providers such as AB Home may seek reimbursement for personal care services performed by personal support specialists. Id. ¶¶ 30-31. In order for a provider to be eligible for reimbursement, a personal support specialist must meet certain training and examination requirements. Id. ¶¶ 40-41. If a personal support specialist has not met the training and examination requirements, he or she “must enroll in a certified training program within sixty (60) days of hire and complete training and examination requirements within nine (9) months of employment[.]” Id. ¶ 33. If a personal support specialist does not pass the required examination within nine months of employment, his or her “services . . . must stop until such time as the training and examination requirements are met.” Id. Providers are prohibited from seeking reimbursement for personal support specialist services rendered by “persons who do not meet the qualification requirements of the Regulation.” Id. ¶ 34.

         Longacre worked for AB Home from January 21, 2014, until June 2, 2015, first as a nurse supervisor and later as director of nursing. Id. ¶¶ 7, 48, 56. Longacre alleges that, when she was hired, Ali told her that AB Home's personal support specialists would not receive a paycheck if the cost of their services was not reimbursed by MaineCare. Id. ¶ 49. Shortly thereafter, Longacre observed that, although some of AB Home's personal support specialists had worked for AB Home for more than nine months without completing their training requirements, those employees were receiving their paychecks. Id. ¶¶ 50-53. Longacre, therefore, believed that AB Home was submitting requests for reimbursement for services rendered by the unqualified employees. Id. ¶ 62. Longacre has identified eight AB Home employees who, between January 2014 and June 2015, (i) “were unqualified for purposes of the MaineCare regulations[, ]” (ii) were scheduled to provide personal care services and did so, and (iii) received paychecks. Id. ¶¶ 105-07.

         II. Discussion

         A. Qui Tam Discovery Limitations

         “Congress has amended the FCA [False Claims Act] several times to walk a fine line between encouraging whistle-blowing and discouraging opportunistic behavior.” United States ex rel. Duxbury v. Ortho Biotech Prods., L.P. (“Duxbury I”), 579 F.3d 13, 16 (1st Cir. 2009) (citation and internal quotation marks omitted). To that end, AB Home cites authority for the general proposition that “courts have rejected a relator's attempt to open wide-ranging discovery that exceeds the complaint's allegations.” AB Home Brief at 1 (citing United States ex rel. Spay v. CVS Caremark Corp., Civil Action No. 09-4672, 2013 WL 4525226, at *3-4 (E.D. Pa. Aug. 27, 2013) (declining “to allow . . . a fishing expedition into potential fraudulent claims beyond 2007 absent some particularized pleading that any such claims occurred”) (footnote omitted); United States ex rel. Powell v. Am. Intercontinental Univ., Inc., CIVIL No. 1:08-CV-2277-RWS-LTW, 2013 WL 12114445, at *5 (N.D.Ga. Feb. 22, 2013) (declining to permit discovery for period prior to January 1, 2005, when plaintiffs did “not plead with particularity fraud with respect to compliance with [applicable] standards prior to 2005”)).

         AB Home argues that the instant case is similar to Spay in that Longacre's complaint lacks particularized allegations that fall outside the dates of her employ. See Id. at 2. It acknowledges that Longacre takes the position that discovery beyond the period of her employment is critical to prove that AB Home either knew that the claims it was submitting were fraudulent or recklessly disregarded whether they were. See id. at 2. However, it observes that, in United States ex rel. Jacobs v. CDS, P.A., No. 4:14-cv-00301-BLW, 2016 WL 4146077 (D. Idaho Aug. 3, 2016), the court declined to broaden the scope of discovery beyond the period of the relator's employment despite the relator's argument that broader discovery was justified “to help demonstrate ‘knowledge and intent.'” Id. (quoting Jacobs, 2016 WL 4146077, at *3).

         AB Home further asserts that “[t]he First Circuit has expressly endorsed limiting discovery to only those claims that satisfy [Federal] Rule [of Civil Procedure] 9(b)'s particularity requirement.” Id. at 3 (citing United States ex rel. Duxbury v. Ortho Biotech Prods., L.P. (“Duxbury II”), 719 F.3d 31, 39 (1st Cir. 2013)).

         AB Home's main concern appears to be that Longacre seeks “to investigate every nook and cranny of AB Home's provision of PSS [personal support specialist] services for a decade, in a search to support potential false claims.” Id. at 2. It asserts that “discovery in a False Claims Act case is not a ‘roving commission to investigate all financial dealings of the defendants[, ]'” id. (quoting United States ex rel. Oughatiyan v. IPC The Hospitalist Co., No. 09 C 5418, 2015 WL 4249195, at *3 (N.D. Ill. July 14, 2015) (internal quotation marks omitted), noting that, in United States ex rel. Bane v. Breathe Easy Pulmonary Servs. Inc., No. 8:06-CV-40-T-24MAP, 2008 WL 4057549 (M.D. Fla. Aug. 27, 2008), the court limited discovery to the time periods and providers alleged in the complaint, see id. (citing Bane, 2008 WL 4057549, at *1).^[2] It warns that, if “discovery that vastly exceeds [the] allegations in the complaint” is permitted, there will be little to “discourage ‘strike suits,' and to prevent the filing of suits that simply hope to uncover relevant information [during] discovery.'” Id. at 5 (quoting United States ex rel. Karvelas v. Melrose-Wakefield Hosp., 360 F.3d 220, 226 (1st Cir. 2004)).

         I am unpersuaded that there is, or ought to be, a general rule in qui tam actions against the allowance of discovery for periods either outside the time frame of a relator's employment or beyond time frames alleged with particularity pursuant to Rule 9(b) in a relator's complaint.

         First, I perceive no reason why the concerns raised by AB Home cannot be addressed through the application of the discovery principles set forth in Rule 26(b)(1), which permits discovery of nonprivileged matters “relevant to any party's claim or defense and proportional to the needs of the case[.]” Fed.R.Civ.P. 26(b)(1).

         Second, as Longacre argues, see Longacre Brief at 5, Duxbury II does not support a wholesale limitation on discovery beyond the particularized allegations of a relator's complaint. The First Circuit's “endorsement” of this limitation was hardly full-throated. Instead, it merely ruled that the district court's tailoring of the scope of discovery to the particularized allegations was “reasonable[, ]” that the “district court was not required to expand the scope of discovery based upon the amended complaint's bald assertions that the purported kickback scheme continued after Duxbury's termination or that it was ‘nationwide' in scope[, ]” and that the “result was entirely consistent ...